Barriers to the Development of the Polish Banking System in the 1990s and to the Increasing Integration of the Household Sector

The last three years have seen the dramatic transformation of the Polish banking system from a monobank that served primarily as an accounting system for the central plan to an increasingly dynamic system of independent commercial banks. Financing for productive enterprise, mortgages and household expenditures however remains restricted by a variety of problems. Some of which will be resolved naturally through increasing competition, while others reflect more profound problems in the macro-environment and the economic structure inherited from the socialist past. There has been a greater integration of households in the banking sector but here also, flaws in the deposit insurance scheme have prevented the efficient intermediation of private savings while deficiencies in the mortgage system prevent necessary expansion of housing construction on a solid basis.